AI: Does not compute

Many utilities are already trimming projections toward reality. Regulators in data-center hot spots are scrambling to shield customers from accelerating and politically sensitive rate hikes — already up 16% in Illinois, 13% in Virginia, 12% in Ohio, and 6% nationwide. Meanwhile, actual data-center demand still barely shows up in national totals. U.S. weather-adjusted electricity use fell in 2023, then rose by 2% in 2024, about one-twentieth due to new data centers. Nearly all the growth comes instead from air conditioning, electrifying buildings and vehicles, and reshoring industry. These needs can all be more cheaply met by better efficiency, and by another vast and potent competitor to fossil fuels: renewables.

However, other AI firms have rushed for gas power, and that stampede has doubled gas-plant costs and backlogged gas turbine deliveries to past 2030, to the point that two-thirds of gas-plant project proposals have no named turbine manufacturer. This jam has pushed about a fifth of projects to substitute off-grid gas power, often using adapted aircraft jet engines. These turbine generators are easily available but engineered to meet peak demand, so they’re inefficient, noisy, and dirty. Running them constantly to power data centers would quickly inflate electricity costs and magnify public health damages. U.S. data centers were already projected to cause more than $20 billion per year in asthma and cardiopulmonary disease costs by 2030. Communities will not welcome additional pollution, water stress, noise, and rate hikes.

Gas markets magnify the financial risks of turning to gas to power data centers. New gas wells decline faster than old ones, while falling oil prices can make new drilling and refracking unattractive. At the same time, exuberant exports of liquefied American gas (and gas pipelined to Mexico) are pushing gas toward both global glut and domestic scarcity. The analysts at BloombergNEF predict that new gas-fired AI power could tip the 2025–30 U.S. gas surplus into a deficit, making volatile gas prices for heating, industry, and utilities spike. Indeed, BloombergNEF says wholesale gas futures for 2028–30 are unsustainably priced below production cost. And whatever the gas price, new gas-fired power plants are likely to become underutilized, subsidized assets that burden electricity customers long after today’s AI ebullience fades. While many data centers will be built, many won’t, and many won’t actually run at full tilt for decades to come — stranding gas plants and pipelines built to power them.

Even as national policy reinforces a gas lock-in, power choices that can scale at AI speed already dominate actual markets. Renewables captured over 92% of the world’s new generating capacity in 2024 and (including storage) about 90% of U.S. additions in 2025, with 93% expected in 2026. They are far cheaper than gas power, keep getting cheaper, sell on constant-price contracts for decades, and finance like low-risk annuities. They’re virtually unlimited and deploy at industrial speed.

Last May, China added 1 gigawatt of solar and wind power roughly every six hours around the clock. Pakistan displaced 30% of its utility power with solar in four years. Vietnam added solar equivalent to half of its coal generation in two years. South Australia generates 75% of its annual electricity from renewables and will reach 100% by 2027, driving 37 firms to propose relocating there to secure stable, low-cost power. Global metals giants Rio Tinto and BHP are relying on ​“renewable baseload” power to smelt aluminum and mine copper. Apple’s data centers have run on fully renewable energy for more than a decade. Google just announced that on-site solar, wind, and battery power will get its new 850-megawatt Texas data center online in 18 months, not five-plus years.

Critics have long claimed that variable renewables are too unreliable: The wind doesn’t always blow, and the sun doesn’t always shine. But evidence shows that intermittency concerns are now generally unfounded. Ten proven carbon-free balancing methods already make high-renewable grids reliable and economic in many countries. One of those methods, batteries, costs 96% less today than it did in 2010. BloombergNEF finds that battery-firmed solar and wind deliver steady power more cheaply than any new fossil or nuclear plants, and many operating ones. That’s why three-fourths of India’s new firm capacity today is solar-plus-storage.

Renewables also offer essential speed. In Sparks, Nevada, the world’s largest solar-powered microgrid continuously powers modular data centers. Solar panels laid on desert ground feed hundreds of second-life electric-vehicle batteries joined to form a superbattery. It was all built in four months and delivers electricity that’s cheaper, quieter, and more reliable than grid power; uses virtually no water; emits nothing; and is even portable. This is what clean, scalable, market-speed power looks like. Gas isn’t it.

AI does have some valuable applications. No one yet knows, though, if its revenues can repay the immense and swiftly depreciating investments required. But while markets are answering that trillion-dollar question, the AI boom must not be allowed to undermine American energy affordability and security.

Utilities and regulators can protect existing customers with a simple safeguard, giving teeth to vague qualitative pledges: Sell power to new data centers only under ​“take or pay” contracts that repay the entire electricity investment regardless. Those agreements should be backed by robust bonds or insurance, priced by capital-market risk experts (not by developers), to ensure that if an AI venture collapses, losses fall on the developer, not on households and small businesses.

If markets, and not mandates, determine the outcome, the conclusion is already clear. Gas, coal, and nuclear are too slow, too costly, and too risky to anchor the next wave of U.S. power demand. The only technologies that scale quickly enough, cheaply enough, and reliably enough for AI already dominate global additions. Policy will now decide whether Americans will enable the new energy system or protect the old — and whether they’ll pay for stranded gas plants or profit from the cheapest and most secure electricity in history.